Conformed Copy - L2961 - Water Supply and Sewerage Sector Project - Loan Assumption Agreement

Page 1 CONFORMED COPY LOAN NUMBER 2961 CO (Water Supply and Sewerage Sector Project) among INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and BANCO CENTRAL HIPOTECARIO and FINANCIERA DE DESARROLLO TERRITORIAL Dated November 8, 1991 LOAN NUMBER 2961 CO LOAN ASSUMPTION AGREEMENT AGREEMENT, dated November 8, 1991, among INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank) and BANCO CENTRAL HIPOTECARIO (BCH) and FINANCIERA DE DESARROLLO TERRITORIAL (FINDETER). WHEREAS (A) by a loan agreement, dated February 8, 1989, between the Bank and BCH (such agreement hereinafter called the Loan Agreement), the Bank made a loan (hereinafter called the Loan) to BCH in an amount in various currencies equivalent to one hundred and fifty million United Stated Dollars (US$150,000,000) on the terms and conditions set forth or referred to in the Loan Agreement; (B) by a guarantee agreement, dated February 8, 1989, between Republic of Colombia (hereinafter called the Guarantor) and the Bank (such agreement hereinafter called the Guarantee Agreement), the Guarantor guaranteed the obligations of BCH set forth or referred to in the Loan Agreement, on the terms and conditions set forth or referred to in the Guarantee Agreement; (C) Law No. 57 of the Guarantor, dated November 14, 1989, provides that the Page 2 assets and liabilities of Fondo Financiero de Desarrollo Urbano, administered by BCH, are to be transferred to FINDETER; (D) the Guarantor, BCH and FINDETER have requested the Bank to agree to the undertaking by FINDETER of all of BCH's covenants, agreements and obligations set forth or referred to in the Loan Agreement, and, for that purpose, to enter into this Loan Assumption Agreement and into the agreement with the Guarantor referred to below; (E) the Guarantor has agreed to confirm its obligations set forth or referred to in the Guarantee Agreement with respect to FINDETER in a supplemental guarantee agreement (hereinafter called the Supplemental Guarantee Agreement) of even date herewith between the Guarantor and the Bank; (F) the Bank has agreed to the request of the Guarantor, BCH and FINDETER, based on the representations made by them about the finances and operations of FINDETER; and WHEREAS on the basis, inter alia, of the foregoing, the Bank, BCH and FINDETER have agreed to enter into this Loan Assumption Agreement upon the terms and conditions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions; General Conditions Section 1.01. Wherever used in this Loan Assumption Agreement, unless the context otherwise requires, the several terms defined in the Preamble to this Loan Assumption Agreement, in the "General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated January 1, 1985" (the General Conditions), and in the Loan Agreement, as amended pursuant to Article III hereof, have the respective meanings therein set forth . Section 1.02. Sections 10.01, 10.03 and 10.04 of the General Conditions shall apply to this Loan Assumption Agreement as if this Loan Assumption Agreement were the Loan Agreement. ARTICLE II Loan Assumption Section 2.01. BCH hereby assigns to FINDETER and FINDETER hereby assumes, and agrees to carry out and fulfill, all of the covenants, agreements and obligations of BCH set forth or referred to in the Loan Agreement, including, without limitation, all liabilities and obligations arising as a result of action taken or omitted to be taken under the Loan Agreement prior to the coming into effect of this Loan Assumption Agreement. The Bank hereby recognizes the succession of FINDETER to the rights and obligations of BCH under the Loan Agreement, and, consequently, FINDETER is hereby substituted for BCH as a party to and Borrower under the Loan Agreement. Section 2.02. All actions taken, rights acquired or obligations incurred under the Loan Agreement by BCH shall be valid and binding on FINDETER as though FINDETER had been BCH and the coming into effect of this Loan Assumption Agreement shall not affect the consequences of any action taken or omitted to be taken by the Bank or BCH under the Loan Agreement. ARTICLE III Amendments to the Loan Agreement Section 3.01. The Loan Agreement is hereby amended as follows: 1. The Preamble is amended by substituting "FINANCIERA DE DESARROLLO TERRITORIAL" for "BANCO CENTRAL HIPOTECARIO", in the first paragraph. Page 3 2 . Section 1.02 . is amended by : (a) deleting paragraphs (d), (h) and (i); (b) replacing the words "the FFDU Operating Manual Statement" by "the Operating Manual Statement" in paragraphs (p) and (q); (c) amending paragraph (z) to read as follows; "(z) 'Charter' means the Borrower's Estatutos approved by Decreto No. 789 of the Guarantor, dated April 17, 1990;"; (d) amending paragraph (bb) to read as follows: "(bb) 'Operating Manual Statement' means the Borrower's manual, satisfactory to the Bank, providing for credit policies and conditions and operating procedures;"; (e) deleting paragraph (ee); (f) designating paragraphs (e), (f), (g), (j), (k), (l), ( m ), (n), (o), (p), (q), (r), (s), (t), (u), (v), (w), (x), (y), (z), (aa), (bb), (cc), (dd), (ff), (gg), (hh) and (ii) as paragraphs (d), (e), (f), (g), (h) (i), (j), (k), (l), ( m ), (n), (o), (p), (q), (r), (s), (t), (u), (v), (w), (x), (y), (z), (aa), (bb), (cc), (dd) and (ee), respectively. (g) adding new paragraphs (ff), (gg), and (hh) to read as follows: "(ff) "DTF" means an annual interest rate equal to the average interest rate offered by private Corporaciones Financieras, (as hereinafter defined), CFCs (as hereinafter defined) and commercial banks in Colombia on their 90 days Certificados de Dep